Singapore Post (SingPost) has achieved considerable growth in revenues and profits for thefourth quarter and financial year ended 31 March 2010 thanks to a better performance in all
business segments and the consolidation of revenue from its wholly-owned subsidiary QuantumSolutions.In 2009/10, the group’s revenue rose by 9.2% to S$525.5 million (€289.2 million). On acomparable basis with the previous financial year when Quantium Solutions was a joint venture,group revenue declined by 2%. This was due to the weaker operating performance in the first half ofthe financial year as a result of the poor economic environment but it picked up in the secondhalf, following the improvement in business conditions.
The group’s net profit also rose 10.9% to S$165 million (€90.81 million) for the whole financialyear. Excluding one-off items such as the benefits from the Jobs Credit Scheme, amortisation ofdeferred gain on intellectual property rights, one-off items relating to the winding up of anassociated company and the impact from the reduction in corporate tax rate last year, the group’sunderlying net profit rose 0.3%.
Mail revenues declined 2.3% to S$360.2 million (€198.23 million) due mainly to lowercontributions from domestic and international mail.
Logistics revenue increased to S$173.9 million (€95.7 million) with the inclusion of QuantiumSolutions. Excluding Quantium Solutions, revenue decreased as a result of lower Speedpostcontributions. Retail revenue grew 2.4% to S$66.9 million (€36.82 million), as higher contributionsfrom financial services and retail products offset the decline in revenue from agency services.
The group’s total expenses increased 12% to S$384.8 million (€211.77 million). ExcludingQuantium Solutions, total expenses would have declined by 0.7% as a result of the group’scost-cutting measures.
In the fourth quarter of 2009, group revenue grew 15.8% to S$133.8 million (€73.64 million). Netprofit also grew 15.8% to S$40.9 million (€22.51 million). Excluding one-off items, the underlyingnet profit rose by 12% to S$36.5 million (€20.09 million). The mail business posted a 4% increasein revenue to S$92.2 million (€50.74 million), from higher contributions in domestic mail,international mail and hybrid mail.
SingPost’s logistics business recorded a 161.9% jump in revenue to S$44.7 million (€24.6million) mainly attributable to the inclusion of Quantium Solutions. On a comparable basis with thesame quarter last year, logistics revenue improved on growth in trans-shipment activities and vPOSTshipping contributions. Retail business saw a 2.9% increase in revenue to S$16.6 million (€9.14million) on the back of higher contributions from financial services and retail products.
Ng Hin Lee, Deputy Group Chief Executive Officer of SingPost, commented: “During the year, wemade two major investments – the acquisition of Quantium Solutions and a 30% equity stake inPostea, Inc. We will extend Quantium Solutions’ business beyond cross-border mail and expand ourcore competencies into the regional markets. Our partnership with Postea, a technology company atthe forefront of innovative solutions for the postal and logistics industry, adds value to ourbusiness. While much focus is on growing the business, we are also maintaining our competitivenessby strengthening efficiencies and leveraging synergies.”
To optimise operations, SingPost rationalised its network of delivery bases from eight to sevenin 2009. The group also set up a centralised gateway operations unit at the Air Transit Centre tohandle all mail, express mail and parcel trans-shipments increasing its competitiveness as aregional distribution hub.
Another initiative to streamline operations and optimise resources was the introduction of the5-day mail collection and delivery service which will take effect on 15 May 2010. This initiativewas launched due to the declining public mail volumes and in particular a 40% reduction of mail onSaturdays, as well as changing lifestyles and business environment. It is expected to generatesavings which will be passed back to customers via discounts on stamp booklets/sheets and rebateson franked mail for a period of a year, SingPost said in a statement.
Looking ahead, Ng said: “While the economy is picking up and growth forecasts are positive, wemaintain a cautiously optimistic outlook, given the challenges facing the postal industry as awhole. To build a more balanced revenue and earnings profile, we are looking to further increasecontributions from markets outside Singapore, in particular in Asia Pacific, and to expand ournon-mail businesses.”
“We are actively seeking new growth opportunities and will explore acquisition opportunities asand when they arise. As part of our growth strategy, we have been actively exploring investment andbusiness opportunities in Singapore and the region. With our strong cash position and the recentS$200 million Fixed Rate Notes issuance, we have the financial capability to fund new investmentsthat may arise,” he added.
